TMI Blog2016 (7) TMI 1282X X X X Extracts X X X X X X X X Extracts X X X X ..... ) has noted in his order that in the remand report Assessing Officer was not able to contradict any of the facts regarding purchase of shares and regarding sale of shares. It is further observed that assessee had paid STT on the sale of such shares and this fact has been noted by learned CIT(A) in his order. Further, we find that while making out the addition on account of capital gain the Assessing Officer himself gave credit to assessee for indexed cost of acquisition to the extent of ₹ 11,67,821/- taking the purchase price at ₹ 11,00,000/-. Further, we find that assessee had sold shares through MTL shares and Stock Borkers Ltd. as is noted by Assessing Officer in reply to question No.24 which is a SEBI registered Stock Br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of long term capital gain on account sale of 1 lakh shares of Geefcee Finance Ltd. The Assessing Officer doubted the claim of assessee regarding long term capital gain and recorded the reply of assessee with regard to various questions in the assessment order. From the reply of assessee recorded in assessment order the Assessing Officer observed that assessee was not able to give reply as to why the shares were purchased and how the shares had risen so many times and therefore, he held the capital gain claimed by assessee was bogus and made addition accordingly by recording the following findings. It can be noted from the above replies that the assessee has not been able to file satisfactory replies to the questions like why the shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 Balance capital gains being added back to the Income 27826685 As per above discussion and the material available on record, the income of the assessee is determined as under: Returned Income 4642140 Add:- Addition as discussed in para 3(a) 27468825 Assessed Income 32468825 (Rounded off) 32468830 4. Aggrieved with the addition the assessee filed appeal before learned CIT(A) and submitted various submissions. The learned CIT(A) after noting various submissions of assessee deleted the additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exempt by the Assessing Officer. As against this clear documentary evidence in favour of the appellant, the Assessing Officer has merely rejected the contention of purchase on the basis of suspicion arising out of reckless/casual replies given to various questions raised by the Assessing Officer in the assessment proceedings. It is important to appreciate here that the assessee had been subjected to search and seizure proceedings under section 132 of the Income Tax Act, 1961 and the search proceedings did not lead to recovery of any incriminating evidence to show that the transaction of purchase of shares was arranged as suspected by the Assessing Officer. It is also seen that no post search enquiries on the issue had been conducted in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was a sham transaction. The addition being without any logical basis is directed to be deleted. 5. Aggrieved the Revenue is in appeal before us. 6. At the outset, the learned DR submitted that the purchase of shares declared by assessee was bogus and also the sales declared by assessee were bogus as the shares were rarely traded at the stock exchange and in a short period of time the value of shares had rises unreasonably from ₹ 10/- to ₹ 200/- and therefore, Assessing Officer had rightly made the addition. 7. The learned AR, on the other hand, submitted that assessee had purchased shares in the physical form and the shares were got dematerialized and were credited to the deemat account of assessee with HDFC Bank, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares through MTL shares and Stock Borkers Ltd. as is noted by Assessing Officer in reply to question No.24 which is a SEBI registered Stock Broker. Furthermore the payment for sale of shares was received through Banking Channels. All these documentary evidences in favour of the assessee were rejected by Assessing Officer merely on the basis of some casual replies given by assessee to the Assessing Officer. However, the fact remains that all the documentary evidences are in favour of assessee and learned CIT(A) has passed a very reasoned and speaking order and we do not find any infirmity in the same. 9. In view of the above, the appeal filed by Revenues is dismissed. Order pronounced in the open Court on 20.07.2016. - - TaxTMI - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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